tv Bloomberg West Bloomberg August 31, 2015 8:30pm-9:01pm EDT
i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. how mark anderson is investing in the face of market volatility across the globe. i'm emily chang and this is bloomberg west. he tells me who he would like to see running the company. who believes we are in a tech bubble and where he expects mergers and acquisitions. we say goodbye to major hollywood films like the hunger games. we start with the markets.
it stocks seeing the worst month in three years. in fact they are losing confidence to -- in beijing's ability to prop up. facebook google and amazon all closed in the red. for more let's head to new york. >> the big take away is that after week like we had two weeks ago, there is almost no recovery possible for the market. week, even though monday was a terrifying 1000 point drop on the dow, we finished up 1.1% for the week. that did not stop the entire month from being the worst august the dow has ever posted in 17 years, it was the worst since may of 2010. the worst for the s&p since 2011. the nasdaq since may 2012. it was all because of that week two weeks ago. take a look at some of the big
losers. reignedmpanies really as far as the point losers. with a poord it off earnings report showing espn did not have the kind of subscriber growth were earnings we would've thought about. cordraised the specter of cutting and viacom took it even further the next day area by a, the biggest loser as far as media companies. you will also note that 21st century fox lost 20%. disney was down about 15% as well. i was just looking at apple. they lost more than 7% for the month. today was down another half percent even though, i'm sure he will talk about this a very cool cooperation announced by john chambers and tim cook, they will work with cisco to make cisco's products work better with apple products and vice versa area interesting stuff there.
emily: this part of apple's big questions into the enterprise did not help them today area and tech companies like apple are not only new markets, they are also being watched in washington. apple is now part of any public-private partnership with the department of defense to build cutting-edge technologies that can be used in the military. secretary of state ashton carter has been courting startups as well. last week i spoke with him. one of the key people he spoke with was venture capitalists marc andreessen. to find outith him what he thinks is behind all of this market volatility. >> i'm not really worried about anything happening here right now, the big and as i think the markets up in trying to adapt to the new information from china. the other thing is, american companies -- global currencies have moved against american multinationals just in the last six months.
i think frankly, wall street was slow to adapt. now the dollar is much stronger against all currencies. when a big company comes and -- the presumption for investors is it's an excuse. i think people are adjusting to this new currency world. i think the currency shift is reflective of how the u.s. is doing really well. from u.s. standpoint, things are going well. emily: so to prioritize profit -- profitability over growth, there will be a lot of dead unicorns ahead. how do you think this will shake these are startups. i think the situation is normal but some of them are going to work well and others won't. in some environment, it's easier to raise money. to me, that does not translate into a call for everyone to panic. i think each company should figure out its own strategy area
that's what we work with our companies to do. sequoia's rip good times, what do sarah now? >> that's are flecked 2008 was not good times. attitude, it can be -- it is be measured cautious and careful. investing growth. when companies are growing fast, we don't open to pull back. if which opened push forward. companies that are doing well will do really well. emily: just a blip. one stock that is gaining today is twitter up three and a half percent back above its ipo. suntrust analysts upgraded his twitter rating from neutral to buy. he expects clarification around labor day on their search efforts. we do know they are scheduled to meet this week we will be watching for developments. i also asked andreessen who he
thinks should become the next ceo. take a listen. >> i am reflexively in favor of founders. i think it's jack or evan are some culmination. -- combination. emily: another store we're watching, potential sanctions aimed at company -- at individuals in china for hacking computer networks. the discussions come in a particularly sensitive time. the president is expected to make his first official statement to the u.s. next month. there is also concern that sanctions could further -- trigger further online attacks. >> the department of defense 50 years ago was the first customer of all new technology companies. over the last 25 years, the defense department focus more on large federal contractors. there is a much bigger focus
from the department of defense now on working with these companies. that's starting to work now. emily: how can silicon valley help national defense? >> i think it's become synonymous with technology. cyber security is a perfect example of that. even conventional warfare is now heavily in length. the future of it is being heavily shaped by new technology. my belief is early-stage companies and new technologies can play on the middle role in national defense or you dina secretary carter certainly the big thingarea dod is the largest high-performance organization in the world. hard, there is no natural fit between organizations that small and that big areas developing cap for young companies can engage having a way to basically get involved early is really critical. that's what this unit out here is set up to do. what's the biggest risk
to our cyber security right now? are we being outspent estimate >> the biggest risk i would say, two things one is we are not used to defending against nationstates. 20 years ago, defenses were against teenage kids. 10 years ago there were against organized crime, now it's against nationstates. the threat profile is change dramatically. cyber security, like other kinds of security is very asymmetrical. the defender has to be correct 100% of the time, but the attack on the needs to work once. defenses are was going to be bigger challenge than attack. we as an industry or so on the process of catching up to that. mark andries and andreessen horowitz. we should mention that bloomberg lp is an investor in andreessen horowitz. coming up, maybe he is
emily: and now to the cloud, worked a reporting another strong quarter as it pushes further into europe. i sent him at this he had to check in on a reading from valuations and consolidation to the progress it's making in its >> theals vertical area marketplace is about twice the size of our hr market area and we are very excited about the prospect area.
call the the earnings city could be profitable if you wanted to be, but you're going ourocus on growth area >> business is a once in a decade transition. we went from the ship from mainframe to client/server back in the 90's. we saw the growth of peoplesoft. we are not once in the decade shift again. it's basically a land grab for market share. let's talk about your competitors. they seem to be getting a lot more aggressive and they and more on marketing than salesforce. heavy defending of that? >> we continue to differentiate on two things, on products and customer success. of our 1000 customers, 70% are in production. we are running at about a 5% customer satisfaction level area emily: when it comes to software, you have such a long history having founded peoplesoft. we talked about the established competitors, then you have the up and comers.
they all want a piece of this market. where you see this going? how do you as a public company stay nimble enough? >> we stay very close to the startup world. we just introduced working ventures. we actually make small investments in small companies. i still hang out with my buddies at greylock to say with just see what's coming down the pipe. because of yorkie greylock, you are also dialed and what's happening on the outside or it you think about the market volatility? >> i don't worry about it very much. i don't think were on the verge of a financial collapse. i think at the end of the day if you focus on building a great company, doc prices follow revenue and earnings. you have to take a long-term perspective. i think there is been a disconnect between the private markets in the public markets. the public markets from -- for tech companies irrational for a long time. the private market less so. maybe with these corrections the two will come close together. emily: how does that shakeout on
the private site? d.c. down rounds are delayed ipo's? >> both. i see a lot more in the way of merger and acquisition activity. there are quite a few interesting properties other than folks like salesforce and workday would like to acquire. the prices have been too high and maybe with this correction they become more attractive. emily: what areas are you interested in? >> the biggest areas i would tear analytics. ofpeople move into the world industry-specific applications, that could be another area of interest for us. emily: when you look at a lot of the recently public tech , what does it say about the health of the valley that a lot of these newly public tech companies are not doing well? >> i think you have to separate out how their stock prices are performing versus how the companies are doing. i am familiar with box. they continue to grow their business. emily: when it comes to smaller
companies, there's been a lot of chatter about sales for selling out to someone. what you take on a? >> you have to ask mark. he's a good friend. we talk about how our companies partner together. i'm not privy to know what's happening. to me, he seems very committed to building a great business and he has been a great partner for us. emily: there's also been chatter about work is selling to microsoft, how would you address that? >> first of all we don't comment on this are rumors. as someone who lived through 99 and found multiple companies, what you think we are seeing right now? the term bubble is thrown around, but it seems to not accurately reflect what's going on. there has beenk a public market bubble. if you look at the valuations intact, they might be a little bit higher than historical levels, but that's largely because of low interest rate. if you look at the working
trading ranges, it's not that different from salesforce of the same size six or seven years ago. the bubble happens -- or has happened in the private markets. that will have to sort itself out. i don't think it will have a big impact on the public markets. there is a bubble in the private markets. when you have to take a company public or have to sell it, we will find out for much of a bubble there is. emily: then will look like 99? >> not to the same extent -- extent. -- venture be an capitalists and investors, not the public market. i don't see that happening. workday ceo. we're focusing on emerging leaders in augmented reality. first up, we have the void. they have a different way of
looking at indoor entertainment. >> the void is an adventure. a lot of people have described it as a br theme park. it really a think it's more than that area its inability to step into a completely alternate we wanted to make it more than virtual reality. in order to enhance it, we had to merge that with physical reality area we are doing everything in house. we have everything from engineers to visual effects artists to various forms of videogame development. what we can do is merge effects likees of wins, hot and cold, moisture. we can do different types of
hydronic. basically, we want people to go in and put on the equipment and go into another world and forget that the equipment was ever there. will be half our experiences, the price point that we are targeting right now is somewhere in the range of 29 to $39 u.s.. develop 250 to 300 centers worldwide within the next five years. this really is not just a business venture for us, we really are trying to bring something amazing to the world. and create any form of entertainment. tomorrow, our series continues. we will show you how augmented reality is changing the game for visual search and mobile advertising. , major blockbusters are leaving net links for hulu. we will tell you which ones and the break,ter
or screens. the world health organization -- the court ruling does not mean that he just is considered a formal illness. we're trying to get a second opinion. another number that caught our eye, 44 billion. that's a staggering amount of money that samsung has lost in market value since a role making at their worst losing streak since 1983. there the largest smartphone vendor and are struggling to can be -- compete against the high-end. now, let's talk about netflix. big changes are coming, customers will no longer be able to stream major blockbusters like the hunger games and world war z. they will switch their
partnerships to hulu after netflix decided not to renew the contract. the company as focusing on more original content with big names like brad pitt and judd apatow. joining me now, our bloomberg news reporter. up all thiskeep original content? people like kevin spacey and brad pitt are expensive, there is no guarantee of another hit. >> it is really risky. but i think that netflix feels that exclusive content and original content are things that are going to grow their subscriber base and this is the path they've decided to do. they have a deal with amazon prime, they have one with vicious tv, they didn't like that, so the deal there making going forward are exclusive. that's throughout the want to
do. >> is their seachange happening in hollywood right now? how to content creators feel about netflix? is all the momentum moving in that direction? that theythe things have proven they can do is that it can really promote a movie or tv series. it's been doing that more on to be series, shows like house of cards are such a part of our culture now. we've seen with tv many a-list actors going to tv where it used to be shunned. positions in a strong and amazon has joined it in this move towards originals. we are seeing netflix wanting to do oscar worthy films. they have one with it yourself which will be making its flash of the trust of focus of lockup of week. they're hoping it will be an oscar contender. to be what are you going
watching in terms of signs to see if netflix can really keep it up? does it all comes down to whether they can come up with another hit? >> i think you really have to look at the subscriber cap's. what they are focusing on now is mobile distribution. there were only out in japan, their first asian country. the goal is to be intended markets by the end of next year. there and 41 million homes right now in the u.s.. really, if you look at the pay premiums subaccount, it's about 60 million. the real growth and will sustain the revenue that they're going is goingo get content to be global distribution and i think you have to realize some of the projects are picking up may have more appeal around the world than in the u.s.. emily: what does it mean for the netflix competitors like hulu and amazon prime? as brad was saying, one of
the reasons netflix is not so bothered about this is cut is it's not exclusive, they want to k-swiss content. they're going to have exclusive content from disney. that there are already looking at it was my command. possibly one. acquisition costs of films and movies. this gives something like an estimated 180 million. ok our bloomberg news reporter who covers entertainment. and head of research at horizon media. that is a today. tomorrow, i will be joined by the head of youtube's global gaming, ryan wyant we will talk about how he plans on the winning over twitch.
>> from our studios in new york city, this is "charlie rose." charlie: sally mann is one of america's preeminent photographers. for three decades, she has captured images that are haunting and romantic all at once. per 1992 series called "immediate family" made her famous and spanned 10 years, featuring children on their home virginia farm. these photos outraged some for their composition as well as nudity. sally writes about that and her life in a new book called "hold still," a memoir with photographs. i spoke with sally mann in a